Editor’s Note
This article reports on a sudden evening downturn in gold prices, following earlier gains. The decline affected both international (COMEX) and domestic (MCX) markets, with a notable drop in rupee terms for global prices. Figures quoted are from the time of writing and may have changed.
After a day of gains, gold prices suddenly recorded a sharp decline in the evening, leading to lower prices in both international and domestic markets. This decline was observed from the global market to the domestic futures market. On the global COMEX market, gold became cheaper by 1600 rupees per 10 grams.
At the time of writing, gold was trading at $4098 per ounce. During the day, it had fallen to as low as $4060 per ounce.
Meanwhile, on the MCX, gold saw a slight decline of 0.58 percent. The price fell by 900 rupees to 1,54,861 rupees per 10 grams.
During this period, gold’s high level was 1,57,185 rupees and the low level was 1,54,546 rupees. In the previous trading session, it had closed at 1,55,761 rupees.
This decline in gold came after silver prices also recorded a fall following a day of gains. What is the reason behind this decline? According to Kedia Advisory, gold is now in a correction phase after touching record highs in late January.
Minutes from the US Federal Reserve’s January meeting indicated disagreements among policymakers regarding future interest rate cuts. Some officials want to pause additional cuts, while some believe that easing could restart if inflation comes under control.
Some members also indicated the possibility of raising rates if needed. Following this, traders scaled back expectations for multiple rate cuts this year. The market’s focus is now on US GDP and PCE inflation data, which will determine the future direction.
Meanwhile, physical demand and liquidity remained low in China due to the Lunar New Year holidays, which increased pressure on gold.
According to experts, gold is currently swinging between Fed uncertainty, dollar strength, and weak short-term demand. Meanwhile, silver is getting support from both industrial and safe-haven factors.
Now, the real game will be decided by US inflation and growth data. If inflation softens, rate cut expectations could strengthen again, and then a new move could be seen in gold and silver.
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